It Begins: ECB Calls For Bids In 3 Year LTRO

So it starts - the ECB has just announced its request for bids for the next all important 3 year (1092 Day) Discount Window, pardon, LTRO operation, which is fully priced in now (and following which the market will look toward the Fed for future easing - enter Bernanke and his Humphrey Hawkins testimony tomorrow), and which will create even more negative carry for Euro banks, as the insolvent hedge fund formerly known as the ECB lends out cash at 1% (in exchange for what can generously be described as used candy bar wrappers) and pays back 0.25% on the same cash redeposited back at the ECB. For the results of operation tune in at 11:15 am tomorrow local time or 5:15 Eastern. The only practical result of this operation will be the expansion of the ECB's deposit facility to the mid €700 billions.

As for what the final size of the LTRO will be, just ask your hotdog vendor: he has as much guidance as anyone else. Regardless of the size outcome, one thing is certain - the banks that are found to use the ECB's Discount Window should prepare for major stock pain, as the market, devoid of easy targets, focuses on them next as the European stigma trade becomes the hedge fund divergence trade du jour. After all there is a reason why the Fed's Discount Window expansion lasted for all of 3 months, and ended up hurting the participating banks (ahem Dexia) more than any other Fed concoction during the early stages of the Depression.

IBelieveInMagic, you probably believe the Consumer CONfidence numbers that just came out too!! If they are going to manipulate numbers they shouldn't make it so obvious..... pretty soon the only two people who believe them anymore (IBelieveinMagic and some guy in Omaha, NE) will be forced to question them as well.....

I sent my secretary over to the ECB with some used "BigMac" and "Whopper" wrappers she collected from some trash cans during lunch hour, and the problem is now solved. Whew, that was a close one. But I heard some French banks are getting bigger loans sending in their empty wine bottles.

All Ben has to do is suggest they might ease further and that will be enough for the bulls to keep dreaming of record highs. The market is exhausted - the only move up now would be parabolic and that's much more bearish than a 20% pullback.

Wow, what a sad state this so called market has become. With all these headlines and events, when looking at the screen, all I see is a bunch of algos bouncing fractions of one cent back and forth. All else have abandoned the casino. What a sad sad state our so called efficient "capital" capital markets have become. It is actually very sad to see and bear witness to what is happening. I do recall not too long ago, there was some logic and forward thoughts to investing (outside of the thieves, I mean bankers' insider trading, etc.)

Now, nothing matters, no one gives a damn about any such forward discounting mechanism or value. All that matters is direction of the EURO/DOLLAR tic. That is all the algos are now looking for and they push accordingly.

With all this news out there, I will go out on a limb and call of the lowest volume outside of a holiday trading day today. As everyone has left the building.

The market has become a ghost market. Events and trends are due to some sleight of hand magic that no one sees. Is the real market even in there anywhere? Or did it die completely somewhere along the way, and we've been following the imposter, inserted during some switch-a-roo?

Even if some amount of the "debt shell game" were to "fix" this, how would we root out the unprecedented ammount of corrution that has pervaded the system since all of this started? How could we ever go back to any sense of normal? 70% haircuts? Does'nt that just mean were not calling defaults, defaults anymore? Where would we go from here? I am stil holding out hope for such a terrible collapse that it hurts everyone, including me so much that all the people rise up from the ashes afterward and say, "never again!" Its going to take something terrible for people to get involved and get proactive. Otherwise its always "new boss, the same as the old boss".

There is a larger plan. These are only the symptoms. It's like riding a rollercoaster and being freaked out by every twist and turn and not realizing where you started from, where you are going and that this is a ride with specific parameters being controlled. The people controlling are not brilliant or amazing in any way, nor are their plans.It is just that they are organized and hold to slow long term plans leveraging their positions. They have invaded the systems and have taken the helms all over. Like a virus, but if we don’t start producing some white blood cells in quantity soon, we are going to have to succumb in full. The western world is being undermined on a fundamental basis because of idealism. Those who think they are the chosen are trying to eradicate others and their creeds. All people are created equal, but not all believe that. It sounds too simplistic and some wacky conspiracy theory targeted against some elite BS, but it’s not. The truth can be initially blinding, deafening and painful, but is still good for you. Investigate critically and objectively.

Thank you Tyler for having the decency and intellectual honesty to call this "thing" the Depression that it is. While millions of Americans have been thrown to the wolves, left to believe that they have lost their jobs through some fault of their own, our leaders in Washington hoping for reelection hide behind the pile of manure they have created calling it anything and everything but what it is.